JOURNAL ARTICLE

Asset Securitizations and Stock Price Crash Risk: Evidence from Nonfinancial Firms.

  • Published In: Accounting Horizons, 2026, v. 40, n. 1. P. 49 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Jia, Yifan; Kim, Jeong-Bon; Mao, Ying; Wang, Ke; Wang, Zheng 3 of 3

Abstract

SYNOPSIS: This study examines the relation between asset-backed securitizations and future stock price crash risk in nonfinancial firms. We argue that the gain-on-sale accounting treatment for off-balance-sheet securitizations facilitates managers' withholding of bad earnings news, leading to higher crash risk. Using a propensity score-matched sample of U.S. nonfinancial firms, we find that firms engaging in off-balance-sheet securitizations are associated with higher crash risk, especially for firms with gain on sales from securitizations. In 2010, the Financial Accounting Standards Board implemented SFAS 166/167 to tighten the criteria for securitization transactions to receive off-balance-sheet treatment. However, our difference-in-differences analysis shows no significant effect of SFAS 166/167 on reducing securitizing firms' crash risk. Further analyses reveal that firms engaging in off-balance-sheet securitization before SFAS 166/167 conduct more real activity-based earnings management after SFAS 166/167. This evidence suggests that firms could continue to hide bad news through alternative channels as substitutes. Data availability: Data are available from the sources described in the paper. [ABSTRACT FROM AUTHOR]

Additional Information

  • Source:Accounting Horizons. 2026/03, Vol. 40, Issue 1, p49
  • Document Type:Article
  • Subject Area:Business and Management
  • Publication Date:2026
  • ISSN:0888-7993
  • DOI:10.2308/HORIZONS-2022-143
  • Accession Number:191990190
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